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Puzzled by drug prices

Prostate Cancer | Last Active: Aug 27 4:05pm | Replies (23)

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@chipe

The free market system in the States dictates the prices of medicines. The pharmaceutical companies here in the USA are totally for profit, and the more, the better. That is why there is/was a big trend for people from the States to mail-order their scripts from Canada.

When there is no generic equivalent, users are at the mercy of the pharmaceutical company. They must, of course, and rightfully so, reimburse themselves for the years of research, trials, etc. Yet they must also please their stockholders, the latter being the holy grail. I have attached a file for the 2023 profits for the top 10 pharmaceutical companies.

A lot of people make a lot of money over prescriptions. If you are uninsured then it's really tough to get the scripts you need because you can't afford them. I am so thankful I have Medicare and a Medicare advantage health plan that is provided to me by my pension system.

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Replies to "The free market system in the States dictates the prices of medicines. The pharmaceutical companies here..."

Gross earnings aren't very meaningful when there's no cost basis. It always gets the natives riled up to hear about greedy _____ making BILLIONS in profit.

You need to look at the net earnings margin so you can see how earnings compared to revenue on a percentage basis.

I looked up an analysis of net earnings margin in % for all sectors and found that drug manufacturing (general) came in at 14%, which was the 15th highest among sectors in the economy. The highest was Financial Data and Stock Exchanges at 29.6%. Given the risk, regulation and R&D involved that doesn't seem unreasonable to me.